ROLE AND RESPONSIBILITY OF THE LAWYER
I. ADVERSARY ETHICS
A. Conflict b/w ordinary morality and role morality of L: L’s heightened obligations to Cs
— role morality — can put L in conflict with ordinary morality, like in Spaulding.
1. Not Volunteering Adverse Info: Spaulding.
a. Rule: Not req’d to disclose adverse knowledge to opposing L, but once they reach
agreement to settle Ls become officers of ct = duty to disclose (can’t present
unjust settlement)
2. Fuller: Function of advocate is to persuade; present case in way most favorable to his
client. Even men thought to be totally guilty have been proven innocent. Rely on
opposing counsel to prevent non-meritorious args.
3. Zabella: Promised to repay debt after SofL up; new promise to pay note must be in
writing, and P admits there was no written promise by D. Holding: For D.
a. Ethical thing is to not invoke SofL unless made in good faith for purpose of SofL
– to keep out stale evidence. Legally, D has sweet case for not paying.
B. Competing Ideals of Lawyering: Zealous Advocate v. Independent Counselor
1. Duties to C: Loyalty, confidentiality and commitment to C while also being officers of
justice system. ZA gives priority to duties that Ls owe Cs; IC assigns more weight to
duties of justice. L fiduciary of C, devoted to advancing C’s interest; L not concerned
w/ morality of C’s objective; L uses all means w/in rules to achieve C’s objective,
regardless of impact on others or relationship to justice.
2. Max Steur: Established Reas Doubt. Caused testimony of witness to be doubted (b/c
looked perjured). Ds acquitted. S exploited hole in P’s case.
3. Competing Ideals of Lawyering: Subin-Mitchell Debate
a. Subin: L shouldn’t discredit parts of prosecution’s case that are true. Defense role
is to act as quality inspector of prosecution’s case.
b. Mitchell: Zealous advocacy; ensure BARD is est’d.
4. Fried: Lawyer as Friend
a. L makes his C’s interests his own insofar as this is necessary to preserve and
foster the C’s autonomy w/in the law; Cs are entitled to exercise freedom under
law, and can’t do that w/o L’s help b/c law so complex.
b. Support Steur: Should establish reasonable doubt.
c. Taking advantage of ambiguity that exists and creating ambiguity where none
appeared are skills that every L cultivates.
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THE LAWSUIT: Formation, Termination, L/C Roles
I. FORMATION
A. RULE: Duty of reas care can arise w/o full A/C relationship under tort or contract law.
1. Tort: Duty triggered when give legal advice in circumstances where it’s reas foreseeable
that someone will act on that advice and, if advice is bad, be harmed.
2. Contract: When Cs reasonably rely on L to their detriment
B. MR 1.18: Duties to Prospective C
1. Duties: Even if relationship doesn’t form, L has duty to give competent legal advice
and protect confidential info; L can’t rep any C w/ interests materially adverse to those
of prospective C if L acquired significantly harmful info from prospective C.
2. Initial Meeting: L should limit the initial meeting to get only the req’d info to learn no
more than need be to determine if a conflict exists in order to not be conflicted out.
3. Conflicts: Can’t rep C w/ interests materially adverse to those of prospective C in same
or substantially related matter if L received info from prospective C that could be
significantly harmful to that person in the matter (exceptions). Firm is DQ’d, unless…
a. (d) Exceptions: L can rep if both affected C and prospective C give informed
consent, OR firm can rep if L who received info took reas measures to avoid
exposure to more DQing info than reas necessary to determine whether to rep C,
and that DQ’d L is screened and written notice is given to prospective C.
C. Togstad: Fishy stuff at hospital, L said she prob had no case, never called back.
1. Formation of A/C Relationship: C went for legal advice, was told had no case, relied
upon this advice. It was reas foreseeable to L C would be injured if advice was
negligently given.
2. C’s POV is controlling as to formation of A/C relationship: She behaved reasonably.
Her POV controls b/c Ls bound by ethical obligations to act paternalistically to Cs to
offset lesser expertise.
3. Malpractice: Didn’t tell about SofL or live up to expert std of care to do prelim fact
investigation to determine if there’s basis for claim; or refer to another L.
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II. TERMINATION & WITHDRAWAL
A. RULE
1. By Cs: At will, unless close to trial or in trial in which case judge can be skeptical:
delay tactics or burdening ct? If C terminates, L gets quantum meruit.
2. By Ls: MR 1.16
a. Mandatory Withdrawal: 1.16(a). If L’s or C’s conduct will involve L in
violating law or ethics rule, but not if C just suggests it.
b. Permissive Withdrawal: 1.16(b). It won’t have “material adverse effect” on C; C
persists in conduct involving L’s services that L reas believes is criminal; C used
in past L’s services to perpetrate crime; C insists on taking action L considers
repugnant or fundamentally disagrees; C doesn’t pay & L gave her notice; or rep
will result in unreas financial burden on L.
i. Ct approval usu req’d; hard when L w/draws b/c C wants illegal stuff. L
should just say professional responsibilities require him to. 1.16(c).
ii. Even if L unfairly discharged by C, L must take all reas steps to mitigate the
consequences to C, such as allowing time for C to get new L, refunding any
extra $. Trend is C gets access to whole file. 1.16(d).
c. Kriegsman: Retained firm for divorce action; firm spent a lot of time, money on
case and wanted to w/draw; she was on welfare and couldn’t pay.
i. Rule: When firm accepts retainer, impliedly agree to prosecute to a
conclusion unless reas cause for w/drawal exists or C consents. Can’t
w/draw just b/c she can’t pay. Obligations to C don’t evaporate once case
becomes more complicated or less profitable than once thought.
ii. Detriment to P: She has very limited resources and firm knew that; puts her
in worse position than if L turned her down in first place b/c now, she can’t
go and retain a new L b/c she has no money.
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III. DIVISION OF LABOR B/W L AND C
A. RULE MR 1.2: Allocation of Authority b/w C and L
1. Ends: 1.2(a). C determines. In civil cases, C gets authority to settle. In crim cases, C
decides how to plead, if waive jury trial, testify, appeal
2. Means/tactics: 1.2(a). L determines, w/ consultation w/ C.
B. Scope of L’s Authority
1. Actual Authority: L binds C  Either express, implied or inherent; when C thru words
(express) or deeds (implied) causes L to reas believe he has authority to act. Inherent
comes from legal rules delegating authority to L to act independently of C consent.
a. Express: C’s oral acceptance of settlement offer to L conveys actual authority on
L to settle.
b. Inherent: Steur makes decision on the spot whether to cross-examine witness and
how to do so. C bound even if disagrees b/c L has expertise.
2. Apparent Authority: When C causes 3rd party to reas believe L has C’s permission to
act. For this, cts generally require showing of reliance and good faith on part of 3rd.
a. Worry: Want to prevent Ls from hijacking C’s authority over settlement, which is
core to C’s autonomy (Fried).
3. Authority to Settle Civil Matters
a. General Rule: No settlement final until signed doc on its way to ct; need actual
authority to settle. Exception: Teleprompter.
b. Teleprompter: C, president, signed settlement docs and arranged for L to file
stipulation of dismissal w/ ct. Then new president came in and refused to deliver
the docs the old pres signed. C says there was no enforceable K b/c agreement was
never delivered.
i. Apparent Authority: President’s manifestations to ITC re settlement
negotiations showed intent to be bound prior to signing; L had apparent
authority to enter a settlement.
ii. L resigned: B/c lost credibility w/ other side; resignation signals I was
screwed by my C and therefore I’m getting out – I didn’t mislead you.
iii. C Manipulation: Used L to see how good a deal C could get b4 new pres in.
4. Authority in Criminal Cases
a. L’s authority: Decide strategic matters even if C objects: witnesses to call, nature
of opening argument, whether to seek change of venue. L must so defend the D as
to require every element of the case be est’d BARD.
b. C’s Decisions: Cs stuck to their own decisions even in tactical matters; if C
insisted he take the stand and then he lost, can’t win on malpractice claim.
c. Barnes: Whether L has duty to raise every non-frivolous issue requested by C to
keep C’s 6th Am right to effective assistance of counsel?
i. Holding: Effect of adding weak args is to dilute force of stronger ones.
Raising every colorable claim runs risk of burying good args. Authority to
make decision rests w/ L; L can override wishes of C. (MR 1.2)
ii. IAC: Harm is element of IAC; not met here b/c C would lose anyway.
iii. Dissent: This gives too much power to L. C is stuck w/ L and L isn’t doing
what C wants; that’s not an agent working for a principal.
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COMPETENCE, LOYALTY and CONFIDENTIALITY
I.
COMPETENCE
A. MR 1.1: Competence. Provide C competent rep – the legal knowledge, skill, thoroughness
and preparation reas necessary for the rep.
B. MR 1.3: Diligence. Commitment to C and zeal. Should carry thru to conclusion all matters
undertaken for a C.
C. MR 1.4: Communication
1. Duty to communicate about decisions that require C consent
2. Duty to consult about means to accomplish the C’s objectives
3. Duty to keep C reasonably informed on the status of the matter
4. Duty to comply w/ reas requests for info
5. Duty to consult w/ C about limitations on L’s conduct when L knows C expects
assistance not permitted by the MRs.
II. CAUSES OF ACTION associated w/ Duty of Competence: MALPRACTICE and IAC
A. Legal Malpractice: Available to any C harmed by L’s departure from stds of care.
1. Damages: Don’t have to pay for legal services not received. Smith.
2. Elements
a. Duty to P: Formed A/C relationship (even partial, eg prospective Cs, 1.18)
b. Breach: Failure to exercise the care that reas competent L would exercise under
similar circumstances. Est’d by expert testimony.
i. EXAM: Ls are held to expert stds of care because of their knowledge and
professional training. Under Smith v. Lewis, a lawyer demonstrated
competence when he or she did sufficient research so as to enable them to
make informed judgments on behalf of their client/fiduciary (third party).
ii. Relevant Community: If non-specialist in CA, std is gen’l std of competence
in CA. If specialist, national std of competence, Peckham.
iii. Complex legal areas: Either get specialist if a reas L would, or be held to that
expert std (at your peril), Peckham.
c. Causation: P must prove case would’ve succeeded if it had been properly
litigated. Case w/in a case: “Would’ve won but for L’s neg.”
d. Harm: Pure economic harm: P would’ve achieved a more advantageous result
had L done what he should’ve done as a competent L (Smith)
3. Uncertainty (Smith) and Complexity (Lucas)
a. Smith: P says L negligently failed in to assert her interest in husband’s retirement
benefits. L says the law was uncertain at the time, let me off.
i. Ignorance isn’t strategic: Legal bargaining chip when law unsettled
ii. Holding: Fell below std of care; even wrt unsettled area of law, L has duty
to conduct reas research to make informed decision for P. L isn’t excused if
his mistake was based on a perceived uncertainty that should’ve been
exploited for C’s benefit.
b. Lucas: L retained to draft a will; drafted clause that violated RAP.
i. Rule: L, by accepting employment to render legal services, agrees to use
such skill, prudence and diligence as Ls of ordinary skill. BUT, L isn’t liable
for every mistake.
ii. Holding: B/c no L understands RAP, can’t hold D liable for not using the
skill, prudence and diligence as Ls of ordinary skill and capacity commonly
exercise, so no malprac.
iii. Critique: Holding Ls to lesser std than Cs, b/c Cs are stuck w/ mistakes they
make; C is screwed
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4. Criminal Malpractice: Can’t prevail as a D unless can prove you’re innocent of
underlying crime; only have claim when already succeeded in overturning the judgment
by appeal or by prevailing on ineffective assistance of counsel claim.
B. Ineffective Assistance of Counsel – Damages: None; conviction thrown out
1. 5th Amendment: Privilege against self-incrimination
2. 6th Amendment: Right to effective assistance of counsel to protect fundamental right to
a fair trial (only applies to criminal trials).
3. Standard for Ineffective Assistance: 2 part test
a. Deficient Performance:
i. Unreasonable conduct under prevailing professional norms – Falling Asleep
ii. Errors must be so serious that counsel is not functioning as counsel
guaranteed by 6th Amendment; competence will be “strongly presumed”
b. Harm: D must show “reasonable probability of a different outcome.”
i. L’s Duty in Criminal Trial: To ensure the basic fairness of the trial, not to be
a zealous advocate.
ii. Problem: You evaluate the outcome on the record you have. But this begs
Q—what would we have learned if the L proceeded differently? Maybe
some info to make us think the right outcome wasn’t reached?
4. Strickland: L actively pursued C’s case until he learned that, against his advice, C
confessed to 2 murders. Also did other things against L’s advice. L then stopped
seeking out character witnesses for mitigation, didn’t look more into C’s mental and
emotional state and didn’t challenge the aggravating factors.
a. Holding: L’s conduct wasn’t unreasonable. Given the overwhelming aggravating
factors, there’s no reas probability that omitted evidence would’ve changed
conclusion that aggravating circumstances outweighed mitigating circumstances.
For IAC, he must have deprived D of fair trial.
b. All L has to do is provide justification for his actions based on a strategy; his
conduct just had to have been “reasonably effective.”
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III. LOYALTY AND BREACH OF FIDUCIARY DUTY (use to drive malprac claim)
A. MR 2.1: Advisor. Exercise independent professional judgment and give candid advice;
Implicates MRs 1.3 (zeal) 1.7 (duty to disclose), 1.8.
B. Fiduciary Relationship: Put C’s interests above L’s and treat Cs w/ utmost loyalty;
continues after representation has ended, entailing duties of openness and disclosure.
C. Third Parties: In situations like Greycas, they’re owed fiduciary duties when L makes
affirmative representations to them that induce their reliance.
D. Breach of Fiduciary Duty: About loyalty.
1. Mirabito: L encouraged investor to invest millions, personally guaranteed money
would be returned. L personally involved in some ventures, but didn’t tell C.
a. Duty: To fully disclose anything that could be relevant and advise C to get outside
counsel. NOTE: This is a conflict of interest under MR 1.8.
b. Breach of fiduciary duty: L had duty to fully disclose circumstances surrounding
the various investments, and should’ve offered C opportunity to obtain
independent counsel prior to investing.
c. Causation: Easier to prove than malprac b/c causation req is less stringent, just
have to prove that substantial factor of harm was L’s supposed disloyalty.
d. Fraud: While usu can only sue for affirmative statements, fraud here b/c L has
duty to disclose his adverse personal interests.
2. McDaniel: L w/held legal services to have sex w/ C, abandoned her when she refused.
L stopped appearing in court, negotiating settlement, or advising her.
a. Intentional infliction of Emotional Distress – Elements:
i. Outrageous conduct by D: L knowingly abused his actual/apparent power
over C, who was vulnerable.
ii. Intention to cause, or reckless disregard of the probability of causing,
emotional distress
iii. Severe emotional suffering
iv. Actual and proximate causation of emotional distress
b. Legal Malpractice: Present, but don’t get damages for emo distress.
*Cases show Ls liable for things common people wouldn’t b/c special duties
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IV.
DUTY OF CONFIDENTIALITY
A. MR 1.6
1. L can’t reveal info relating to rep unless C gives informed consent or disclosure is
impliedly authorized (discuss C info w/ other firm Ls, or admit undisputed facts). L
may reveal info relating to rep to extent L reas believes necessary:
a. to prevent reas certain death or substantial bodily harm (eg. toxic spill),
b. prevent (or mitigate after it happened) C from committing crime or fraud that is
reas certain to result in substantial financial or property injury, of which C used
or is using L’s services to commit
c. to secure legal advice about L’s compliance w/ Rules
d. to comply w/ law or ct order (but L should contest it)
e. to est. a claim or defense on behalf of L in controversy b/w L and C or to est
defense to criminal or civil claim against L based on C’s conduct
f. Policy: Fosters trust; C can communicate fully and frankly even as to legally
damaging subject matter.
g. Broader than A/C Priv: Protects all info “relating to rep” whether L learned
before, during or after rep, whether or not disclosure would harm/embarrass C.
Applies even after C dies/rep ends, like A/C privilege. Duty not to use info
about principal against him or for personal gain of agent.
i. Can’t go to bar and tell friend details of case you’re working on even
though A/C doesn’t apply since you’re not in ct.
h. Applies to hypotheticals, or revealing irrelevant C info that could lead to
discovery of relevant C info
B. Retaliatory Discharge – Balla: In-house counsel told president to reject shipment b/c
didn’t comply w/ FDA regulations, president went thru w/ it, L discharged.
1. Holding: L has no C/A against C for retaliatory discharge. General rule that employer
may discharge at-will employee for any reason or no reason at all.
2. Retaliatory discharge: Allows a narrow exception to at-will employment, b/c of public
policy. L req’d under MRs to report intention to sell bad shipment, so public policy to
safeguard health was already safeguarded. In-house counsel have to be ethical. If inhouse counsel are granted right to sue their employers for retaliatory discharge,
employers might be less forthright w/ them.
3. NOTE: Trend is against Balla; want to prevent corporate malfeasance
C. No Duty to Warn about Dangerous Cs – Hawkins: C’s mom wanted C committed to
mental hospital. L, following C’s wishes, got him released. D then tried to hurt mom. Mom
sued L for not warning her about his mental state.
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V.
A/C PRIVILEGE
A. Purpose: Controls what evidence can be compelled in ct (inc. discovery). Encourages open
communication b/w C and L. Protection continues after rep ends and C dies. Enables people
to comply w/ law  circles to C-F exception.
1. Can’t put L/C on stand and ask re content of conversations. But if asked about
underlying events, NOT conversation, C can’t assert A/C. Instead, can invoke 5th Am.
But in civil case, C would have to testify b/c wouldn’t have 5th Am priv.
2. Held by C, not L, so L can’t invoke it if C waived it.
B. Elements
1. Communication: Doesn’t have to be verbal (like showing tattoo). Privileged if relevant
to legal subject matter on which C seeks legal help.
a. Documents: Protected if prepared for purpose of seeking Ls advice
b. NOT covered: Pre-existing docs, observations, underlying facts
2. Made b/w privileged persons: L (and assistants) and Cs.
a. Client: Person who consults w/ L to obtain legal advice
3. In confidence: Privilege lost if communication isn’t made in secrecy; presence of third
parties destroys privilege. Also, C waives it if later tells other people about what she
said to L or what L said to her.
4. For purpose of obtaining or providing legal assistance to C: “Pillow talk” is not
receiving legal advice.
C. Joint Cs: Communication privileged but not when one C sues other.
D. Corporate A/C Privilege
1. MR 1.13: Organization as Client. L employed by corp represents corp, not any -ee.
When employee’s interest becomes adverse to that of the corp, L must notify -ee that L
doesn’t rep him and he should get independent L.
a. (b) If L knows that any employee is engaged in illegal activity that will
substantially injure the corp, L should tell higher authority in the corp.
b. (c) If highest authority does nothing and L reas believes the violation is reas
certain to result in substantial injury to the corp, L can reveal info relating to the
rep whether or not 1.6 permits it. *Doesn’t apply when L retained by corp to
investigate bad stuff, or to defend the corp or an -ee in a criminal case.
c. NOTE: Any measures taken should, to the extent practicable, minimize the risk of
revealing info relating to the rep to persons outside the corp. It’s not necessary that
the L’s services be used in furtherance of the violation, but it’s req’d that the
matter be related to the L’s rep of the org.
2. Rule before Upjohn: Narrow; Control Group Test. Doesn’t protect info-gathering from
people not in control group. Criticism: Often, the people who have relevant info are
middle management and since they’re not in the control group, if they talk to the L their
communication won’t be confidential.
3. Upjohn Rule: Protects communications made by company employees to L for
company at direction of corporate superiors to secure legal advice from counsel.
a. NOTE: MM now less protected b/c control group can freely waive the priv,
exposing what he said to discovery. Company can fire him if he doesn’t talk. Once
they have no downside to asking him, manager is more exposed.
b. Benefits: Since C and L can communicate freely, get better advice from L; if have
lawsuit, you know what other side doesn’t about “where the bodies are” so you
can plan better. Management can find out everything and it won’t be discoverable
= incentive to investigate.
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c. Waiver: Only control group can waive. Best thing is to have middle manager get
own L and not say anything unless covered.
d. Still doesn’t protect underlying facts and docs. IRS could interview employees
and obtain same facts Ls recorded.
4. Meehan: P is former CEO of a company that’s now suing him. Company’s L tries to
use what CEO said to him against CEO.
a. Rule: No A/C relationship b/w L and C b/c L didn’t rep him, repped company. L
can use info received from officer in connection w/ company matters against him.
b. Policy: If L to corp was also L to employees, he’d have divided loyalties
E. Work-Product Doctrine
1. Definition: Governs docs prepared by Ls in anticipation of litigation that don’t include
communications protected by A/C priv. Hickman. Docs are discoverable only upon
showing that party seeking them has substantial need for them and is unable w/o undue
hardship to obtain their equivalent by other means.
a. Mental Impressions Protected: Still, ct protects mental impressions, conclusions,
opinions, and legal theories of L concerning the litigation.
2. Exception: Doesn’t cover material prepared as part of future or ongoing crime or fraud,
whether or not in anticipation of litigation.
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F. Crime-Fraud Exception to A/C Priv
1. Corollary to MR 1.2(d): Prohibited Assistance. Can’t use L to plan/commit crime or
fraud and then use A/C privilege to protect that evidence.
a. RULE: C communications to L “in furtherance of criminal/fraudulent activity or
closely related to it” aren’t privileged. Cts usu assume L is unaware of and didn’t
assist in C’s crime.
2. Past v. Ongoing Crimes: Applies to ongoing/future crimes, not past crimes, but
undiscovered fraud not yet rectified may be considered ongoing.
3. Elements
a. P/F showing that C engaged in criminal/fraudulent conduct when sought L’s
advice, that he was planning such conduct when he sought L or that he committed
crime/fraud having received L’s advice.
b. Legal assistance was obtained in furtherance of C’s criminal or fraudulent conduct
or closely related to it.
i. Satisfied by showing that the communication is related to the criminal or
fraudulent activity established under the first prong.
c. Factual basis adequate to support good faith belief by reas person that ct-review of
the privileged docs will show the C-F exception applies
4. Mass Prep School: Thought L investigation would be protected by A/C. Asserted AC
when govt said tell us what you learned re sex abuse. A/C Inapplicable: Given legal
obligation to report, anything learned in doing the investigation had to be reported and
if you don’t that’s a fraud. Can’t evade duty by hiring L.
5. Shroeder: Tax evasion charges. L prepared C’s income tax.
a. Holding: C-F exception applied. Govt est’d P/F case that C willfully made false
statements on tax returns by not reporting all his income (prong 1). Any legal
assistance C rec’d in generating income or in disposing of income he didn’t intend
to report must be treated as related to his evasion (prong 2).
6. Ohio-Seeley: C violated law, went to L saying we liked the K though, write us another
one. L writes it and says I don’t think this’ll work either, C says let’s try.
a. RULE: If L simply advises C that C’s conduct is probably illegal, rather than
giving recommendations for breaking the law or not getting caught,
communication is protected.
i. If client continues to break law despite L’s assessment that conduct is
probably illegal, conduct does not implicate L or trigger C/F.
b. Holding: C wasn’t committing crime qualifying C/F exception; Knowledge of L’s
prediction that chances are low doesn’t = intent
7. Bauer: C consulted L about bankruptcy. L advised C to disclose all assets and avoid
lying on bankruptcy petition. C did opposite.
a. Holding: No C-F b/c no connection b/w L’s advice and C’s actions.
b. C/F exception does not apply when: (1) L didn’t advise C to do it or (2) L
wasn’t “instrument” in C/F
8. Purcell: C tells L he’s going to burn house. L dissuades, discloses to prevent it.
a. Puzzle of case: Exception to duty of confidentiality triggered b/c C is intending to
commit a crime, so L discloses. But don’t want govt using the conversation as
basis for convicting.
b. Holding: A/C privilege attaches; C-F doesn’t apply b/c advice wasn’t sought to
further the criminal activity.
c. Policy: Gives C power to trust L b/c whatever C says will be protected by narrow
definition of C-F exception.
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G. Waiver of A/C Privilege
1. Rule: A/C priv continues indefinitely unless action/inaction of C terminates the
confidential status of the communication
2. Ways C can Waive A/C Privilege
a. Consent: Disclosure of privileged communication in unprivileged setting
b. Conduct: Failure of L to object to attempt by another to obtain or provide
evidence of a privileged communication.
3. Scope of Waiver: Subject Matter Waiver Rule. If C says at trial “my L said X to me
about Y,” she waived priv as to X and as to all communications b/w C and L about Y.
4. In Re Columbia. Fraud settlement negotiations, C gave docs to DOJ, which agreed
stringent confidentiality provisions would govern obtaining them. Then others wanted
to sue C, tried to compel them from C. C refused b/c of A/C.
a. Rule: A/C waived by voluntary disclosure of private communication to 3rd
parties. Once C waives priv to one party, privilege is waived in toto.
i. Exception: If disclosure takes place in communication itself covered by a
priv, no waiver. So L can share C confidential info w/ another L to get
advice on professional responsibilities.
b. No selective waiver: B/c it encourages strategic use of A/C (sword).
c. Dissent: Encourages more cooperation if they can selectively waive
5. CONDUCT: Von Bulow. Implied waiver by conduct. L did investigation into murder
and selectively disclosed only bad evidence to DA; VB convicted as result. On appeal,
VB said if you disclose anything, have to disclose everything on same subject matter.
6. Waiver by Subsequent Disclosure: Von Bulow. L publicly disclosed info in book; ct
said you’ve waived as to info disclosed but not to any more info b/c disclosure was
extrajudicial so didn’t prejudice anyone in the legal proceeding. It’s unfairness inside
the legal proceeding that’s key.
7. Privileged SD isn’t waiver: As in settlements or plea bargaining.
8. Inadvertent Disclosure: Trend — Not waiver. Duty on receiving L to return.
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VI. SELF-DEFENSE EXCEPTION TO DUTY OF CONFIDENTIALITY
A. MR 1.6(b)(5): L can disclose confidential info relating to rep to extent L reasonably
believes necessary to … 4 types of cases
1. C charges L w/ wrongdoing in course of rep: Eg. Malpractice suit. Can preemptively
disclose when C is threatening to sue to prevent suit.
a. Waiver by Putting in Issue: Subject matter waiver implied when C puts its
communication w/ L at issue in lawsuit or when L’s conduct is put in issue by 3rd
party; L may disclose privileged info to defend herself, even though no C waiver –
implicit or explicit – exists.
2. L sues C to enforce some duty owed L, such as payment
3. To respond to civil/criminal claim/charges based on C conduct
4. When 3rd person accuses L of wrongdoing in course of rep: Meyerhofer.
a. Meyerhofer: Complaint served on firm, C and firm L Goldberg, who had since
quit. G tried to prove noninvolvement, gave P copy of affidavit he wrote to SEC 3
months earlier to verify his nonparticipation to convince P he’s innocent. P
satisfied and dropped G. Then D moved to DQ P’s Ls b/c G obtained confidential
info from D’s C which he revealed to P.
i. Holding: L can reveal confidences necessary to defend himself against
accusation of wrongful conduct. Had to submit affidavit b/c since he wrote it
earlier, it proved his story wasn’t just made up in response to P’s complaint.
ii. NOTE: Under today’s rules, G would have total permission to disclose to
prevent this C fraud.
iii. This is NOT an A/C priv case: That only applies in court. Here, w/ duty of
confidentiality, can disclose even before proceeding starts to avoid suit.
13
CONFLICTS OF INTEREST
I. LAWYER-CLIENT: Breach of fiduciary duty concerns.
A. MR 1.8: L can’t enter into business transaction w/ C or acquire pecuniary interest adverse to C
unless: Consent +. Objective & Subjective Prongs.
1. Transaction must be fair and reas and fully disclosed to C in writing
2. C advised in writing of desirability of, and given reas time to, get independent L
3. C gives informed in writing to essential terms and whether L is repping C in it
B. Other MR 1.8 Limitations
1. Can’t use info relating to rep of C to C’s disadvantage unless informed consent
2. Gifts: L shouldn’t get gift from C or prepare doc that gives L gift unless L is related to
that person.
3. Compensation: L shouldn’t get paid from someone other than C; shouldn’t pay C’s
litigation costs.
4. Sex: L can’t have relationship w/ C unless already existed before A/C relationship.
5. Limiting Liability: L can’t make agreement limiting L’s future liability to C for
malpractice unless C is independently represented or L gives C advice to get own L
6. Imputation: All these conflicts are imputed to the firm, except for sex. This means other
Ls in the firm can’t engage in conduct the personally prohibited L can’t engage in (rather
than representation as in 1.10). This means eg L in a firm can’t enter into a business
transaction w/ C of another L of the firm w/o complying w/ “unless” above, even if that L
isn’t involved in C’s rep.
C. Neville: L goes into real estate transaction w/ C; L isn’t repping C in this particular transaction,
claimed he was just a scrivener.
1. Holding: Fiduciary duty to C continues beyond completing any particular matter which L
undertakes for C; arises when A/C relationship est’d and continues until abandoned.
2. Policy: Cs rely and trust Ls; can’t turn trust on and off even if C knows L isn’t repping
him in particular transaction. Duty applies so long as the C may reasonably feel L is
considering his interests.
3. Full Disclosure: L must disclose every fact to give full explanation of divergence in
interest b/w L and “C” and advise C to seek independent counsel.
4. Stranger Test: If L were repping C in deal b/w C and 3, would L recommend C accept
these terms? Would C want to know about L’s personal conflict?
5. Relationship effect: Undermine trust in the L.
D. Mershon: L formed corporation w/ C and 3; C put in land, L put in law, and 3 would pitch in
engineering servs. Stalemate; C died. L thought parties agreed that if development didn’t occur,
L and 3 would relinquish their interests in the corporation to C. 3 refused to relinquish, so C’s
estate is now encumbered.
1. Holding: Nothing was done to assure C would get farm back if development didn’t occur.
Even though L gained no profit from transaction, still violated ethics code b/c didn’t tell
C to get independent counsel and failed to protect C’s land.
2. Full Disclosure: Violation est’d whether or not C suffers $ loss. Even where terms are
reas, failure to make full disclosure of potential conflict of interest is violation.
E. Passante: L arranged loan to baseball card company. Directors agreed among themselves L
should receive 3% of company’s stock. Years later, when company became worth more than
$100 million, L asked for his shares.
1. Holding: If this was freely bargained, L had duty to give card company opportunity to get
separate L in the course of that bargaining (which L didn’t). If it wasn’t freely bargained
for (a gift or threat), it would be invalid.
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F. Property/money: MR 1.15. Can’t commingle own money w/ C’s money.
1. Duties: Segregation; notification; record keeping; delivery; accounting
G. Advocate-Witness Rule: When L reps C in transaction and then matter goes to litigation.
1. MR 3.7: Lawyer as Witness. L can’t act as advocate at a trial in which L is likely to be a
necessary witness unless…
i. Testimony relates to uncontested issue
ii. Testimony relates to nature and value of legal services rendered in case, or
iii. DQ of lawyer would work substantial hardship on C
2. L may act as advocate in trial in which another L in his firm is likely to be called as
necessary witness unless precluded from doing so by MR 1.7 or 1.9.
3. Even if exception applies, still might not be able to if conflict exists under 1.7 or 1.9 such
that there’s substantial conflict b/w C and L’s testimony.
4. Policy: Inconsistent roles. Witnesses testify about facts, Ls spin facts
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II. CLIENT-CLIENT: CONCURRENT CONFLICTS
A. Definition: Arise b/w 2 present or prospective Cs or one present and one prospective C
B. MR 1.7: Direct Adversity and Material Limitation
1. Withdraw From Representation When:
a. Cs Directly Adverse, or
b. Significant risk the rep of one or more Cs will be “materially limited” by L’s
responsibility to another C, former C, 3rd person, L’s personal interest.
i. Former C: Unlike 1.9, where need consent of former C, w/ concurrent
conflicts, need consent of each present affected C.
ii. Personal Interest: Like Enron, Ls investigating own work; business rel.
2. May Represent IFF: Consent +. Objective and Subjective.
a. L reas believes can provide competent, diligent, rep to each C: Eg. Discrim and
antitrust suits; L can be detached professional
i. Objective Prong: Representation effects. Make sure L will be zealous.
b. Each affected C gives informed consent in writing
i. Subjective Prong: Relationship effects. C consents = C is comfortable.
3. NONCONSENTABLE: L both repping C and suing C in same litigation.
4. Waivers: C can waive future conflicts but only if fully understands consequences
5. Relationship Effects: Eg. Repping 2 parties whose interests are adverse on entirely
unrelated matters: No rep problem, but both working for and suing same C which can
damage relationship w/ C; hard for C to trust you.
6. Representation Effects: Take C confidential info and use it against C.
C. Direct Adversity
1. Definition: L reps Cs that are opposed to each other, even more direct when matters are
more related and most direct when matters are identical.
2. Paradigm: When L both represents a C and sues the C, even when the matters are
wholly unrelated (betrayal), b/c C might feel L will pursue the C’s case less effectively
out of deference to other C, ie. rep will be materially limited by L’s interest in retaining
current C.
a. Litigation: Can also occur when L has to cross-examine C who appears as witness
in suit involving another C when that person’s testimony will be damaging to the
C represented in the suit.
b. Economic Adversity: Simultaneous representation in unrelated matters of Cs
whose interests are only economically adverse doesn’t ordinarily constitute
conflict of interest so may not require informed consent.
c. Transactional: When L reps seller of business in negotiations w/ buyer repped by
L, not in the same transaction but in another unrelated matter.
3. Concerned w/ Relationship Effects: Creates antagonism b/w L and C. Worry about
diminished loyalty, diminished trust, even in unrelated matters.
4. Westinghouse: Firm repped W in action anti-uranium. Also repped API, of which KM
is member, for pro-uranium thing, and got lots of confidential info from KM even
though KM not the C; created fiduciary relationship and partial A/C relationship. So
firm is representing KM and suing KM at same time.
a. Subject matters of suits are very similar: Info given to L by KM can be used
against KM. Confidentiality issue.
i. Direct adversity is allowed in different factual matters b/c no potential for
abuse b/c confidential info gained in each case can’t be used against C in
other, unrelated matter. Here, used C’s info against C.
b. Holding: DQ firm. Diverging interests and antagonism implied.
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D. Material Limitation: Concerned w/ loyalty and confidentiality
1. Definition: Significant risk L’s ability to carry out best course of action for C will be
materially limited as result of L’s other interests. Interests of Cs don’t have to be so
opposed to be adverse, but still a problem b/c L will likely favor one C over other or eg,
decision favoring one C will create precedent likely to seriously weaken L’s
effectiveness in repping another C in diff case. W/draw, Inf Consent
a. Former C Conflicts: Consider L’s responsibilities to former Cs under 1.9.
b. Personal Interest Conflicts: L’s own interests shouldn’t be allowed to have any
adverse effect on C, such as discussing employment w/ opponent of C. See also
MR 1.8 for special business rules.
2. Concerned w/ Representation Effects: Diverging interests likely have harmful impact
on quality of rep of some C. Pulling Punches; NYC Ballet.
a. Consentable: Dancer would want L b/c L would know how hard to bargain,
NYCB would want L b/c if anything they have upper hand.
b. NOTE: This joint rep is disfavored b/c to do well for one C is probably to screw
over other C.
c. The more divergent the interests of 2 Cs are (or are likely to become) the greater
the potential for antagonism to interfere w/ relationship b/w L and C.
3. Fiandaca: Firm repped one class of female prisoners that wanted better facility; wanted
to have it at part of school that firm also represented in another matter. School didn’t
want them. Firm rejected offer to have it at school. State filed DQ.
a. TEST: Do divided loyalties adversely affect the rep?
b. Firm owed both prisoners and school undivided loyalty and accept best offer
available; these interests were in direct conflict – had to simultaneously represent
vigorously two conflicting Cs.
c. Divided Loyalties: Irrelevant ct wouldn’t allow settlement offer anyway
d. Holding: Material limitation: YES, representation effect. No reas L would
conclude repping both Cs wouldn’t create conflict (non-consentable). Direct
Adversity: NO, b/c trial ct would’ve never entertained settlement offer, interests
would never be directly opposing each other. TC should’ve DQed.
e. NOTE: There doesn’t need to be harm, just impaired representation.
E. Criminal Litigation
1. Joint Representation: Create substantial risks of conflicts; strongly discouraged. But if
forbid joint rep, forbid Cs from picking their own Ls.
2. Ineffective Assistance of Counsel – Cuyler: L jointly repped co-criminal Ds.
Convicted; alleged IAC b/c defense L represented conflicting interests. C didn’t take
stand b/c cross-exam may have disclosed an extramarital affair not b/c L bad
a. Possible Material Limitation: Might want to pursue some args on behalf of one
D that wouldn’t want to pursue b/c of impact on other D.
b. Actual Conflict: Make a strategy that benefits one D at expense of other.
c. Holding: L’s decision to rest C’s defense was a reas tactical response to the
weakness of the circumstantial evidence presented by the prosecutor.
d. STANDARD for IAC: C must demonstrate actual conflict of interest adversely
affected L’s performance; don’t need to show “prejudice” b/c it’s presumed. Show
L, b/c of conflict, did something L wouldn’t have otherwise done, or didn’t do
something would’ve otherwise done. “I didn’t do this b/c I thought it’d be bad for
the other D.”
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F. Joint Representation
1. Benefits: Lower transaction costs to Cs. Disads: Potential for conflict/divergence
2. Material Limitation: When repping several Cs w/ diff interests, duty of loyalty to all
will inevitably be infringed.
3. A/C Privilege: If Cs sue each other, parties can’t assert any A/C privilege.
4. Confidentiality: No confidentiality among jt Cs; info is shared
5. B/c L is req’d to be impartial b/w commonly repped Cs, rep of multiple Cs is
improper when impartiality can’t be maintained.
6. Representing Buyers and Sellers: Still MR 1.7, Consent +
a. Reasonable L: L can rep jt Cs if L can fulfill duty for each C impartially and
obtains consent of each C after explanation of risks and benefits wrt jt Cs. Critical
“reas” Qs to ask are re likelihood a difference in interests will eventuate and if it
does, whether it’ll materially interfere w/ L’s independent professional judgment
re best interests of each C.
i. Informed Consent: L must advise of right to separate counsel, warn no
A/C, shared confidentiality.
ii. Withdraw: If at any time during rep it’s determined L can no longer
represent all impartially, L must w/ draw from repping 1 or all. Also, if C
tells L to keep something from other C; exception: may disclose crime or
fraud on other C, A v. B  keeping H’s kids secret was fraud on wife.
b. Callahan: L handled sale b/w 2 Cs. Previously, L was C2’s L; had corp together.
L didn’t tell C1 that. C2 defaulted, L told C1 don’t worry he’ll pay. L never told
C1 she didn’t have a secured interest in the real estate.
i. Should’ve disclosed L and C2’s relationship: Reasonable person should be
worried L previously repped C2.
ii. Should’ve advised C1 of risk: Unsecured lien = dangerous.
iii. Misrepresentation: Misrepresented to C1 that they had secured lien; failed to
tell them they had no forecloseable interest, even though they asked him to
foreclose several times and he said don’t do it.
iv. Duty of good faith on L doesn’t always cease immediately upon termination
of employment; it continues as long as influence created by the relationship
continues. C1 looked to L for help and his conduct in failing to disclose to
them that they had no lien on the property to secure the balance due them
clearly rises to level of deceit.
c. Simpson: Disloyalty, incompetence. C1 went to L to sell corporation. As security
for C1, L took lien on company’s stock. C2 started not paying on the note; L
restructured note b/w parties. L told C1 that if interests b/w C1 and C2 diverged,
“we would have to support you.” Later L told her to get another L, he’s supporting
C2. C2 filed bankruptcy, C1 never got fully paid.
i. Breach of fiduciary duty possible: A/C relationship b/w L and C1 existed;
she relied on him. Can use breach of F/D to drive malprac claim.
ii. Liability may not be premised solely on the fact that an L repped both buyer
and seller; after full disclosure by the L, it may be proper in some
circumstances for L to rep both sides in real estate transaction.
iii. Malpractice: Reas L would’ve provided for not just lien on stock (which can
be worthless) but lien on assets (the actual equipment). Almost fraud on C to
restructure deal when L knows buyer is in financial trouble and only get lien
on stock which is worth nothing.
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III. CLIENT-CLIENT: SUCCESSIVE CONFLICTS
A. MR 1.9: Consent Only. B/w former C and present or prospective C.
1. RULE: L who formerly repped C in matter shall not rep another C in same or
substantially related matter in which that Cs interests are materially adverse to interests
of former C unless former C gives informed consent in writing.
2. Elements: Forbids Ls from repping new Cs when:
a. L represented former C at some previous time
b. Current C’s interests must be “materially adverse” to those of former C
i. Material Adversity: In b/w direct adversity and material limitation
c. L’s current rep must involve “same or substantially related” matter (facts)
i. Policy: Protects values of confidentiality and loyalty; duty not to use info
acquired from former C against them. Otherwise, Cs will be reluctant to disclose
confidential info; erodes confidence and trust in Ls, diminishes quality of rep.
d. No written informed consent from C
3. Different J approaches to Substantial Relationship Test:
a. MR 1.9: Involves same issues or otherwise big risk confidential info would
materially advance C’s position in subsequent matter.
b. Brennan’s: MAJORITY APPROACH. Reas person would look at facts and legal
issues of former matter, compare them w/ present matter and conclude that it’s
likely that info L got in former matter could be used against former C by present C.
c. Narrowest: Relationship is patently clear and issues almost identical.
d. Broadest: If L could’ve obtained confidential info in first rep that would be relevant
to 2nd rep.
4. NOTE: May need consent from current C too, b/c of MR 1.7 b/c worry L may pull his
punches in repping current C to avoid harming former C.
5. Remedies: Disqualification thru motion to disqualify.
6. Sanctions: Reprimands, suspension, disbarment.
B. Waivers: To avoid DQs, firms put provisions in K where C agrees to waive certain future
conflicts should they arise  conflicts that might occur after firm stopped repping C that
signs the waiver.
1. Policy: Ls do this b/c fear opportunistic refusal of former C to grant waiver after the
fact even in situations where harm to C is slight.
2. MR 1.7: Advance waiver fine if get informed consent
C. Joint Representations
1. Brennan’s: L originally repped P and D when they were one entity. Subsequently, D
broke off and formed own corporation. L then went to rep D and severed connections
w/ P. For this suit, L retained help of L2 to assist him.
a. Loyalty Crucial, Not Confidentiality: Successive conflicts cases are usu about
confidentiality: exposing info to current C that hurts former C. Here, no worry
about that b/c earlier rep was jt rep – shared info. It’s a loyalty issue, b/c it’s
disloyal for L to represent C for years, and then take up rep against him in a
substantially related matter.
b. All Elements Present:
i. Former C
ii. Material adversity of interests: Practically direct adversity
iii. Substantial relation b/w the matters
iv. No Consent
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c. L2: No DQ b/c no confidentiality concern since D already knows everything and
no disloyalty concern b/c L never had A/C relationship w/ P; he was retained as
co-counsel, never had direct relationship w/ P or D
d. Holding: Conflict of interest is readily apparent; DQ L. Vindicates interests in
trust and reliance C’s place in their Ls.
2. Primary and Secondary Cs: MINORITY Js
a. RULE: When a jt rep terminates, L may continue repping a “primary” C against a
“secondary” C.
b. Allegaert: L repped C, C had deal w/ X for jt business. Firm repped C and X in
matter affecting business. Then X went bankrupt and trustee in bankruptcy sued
C. Trustee moved to DQ L b/c of prior rep.
i. Holding: No DQ; before the substantial relationship test is implicated, must
show L was in a position where he could’ve rec’d info which his former C
might reas have assumed L would w/hold from present C. B/c X knew that
info given to L would be conveyed to C, substantial relationship test is
irrelevant. L allowed to dump secondary C.
ii. PROBLEM: 1.7 says L can only do jt rep if can be equally loyal and
impartial to both Cs. Jt rep can satisfy req that L be loyal and competent to
both even if he says one is primary and another is secondary ONLY IF their
interests are aligned. When their interests are separate, can’t represent both
of them b/c can’t do good job objectively on behalf of both of them.
3. Economic Competitors
a. General Rule: Econ competition not enuf for material adversity b/c that would
mean L can only rep one C in a particular business, too strict
b. Exceptions – Maritrans: L dropped one C and repped C’s major competitors.
Helped previous C fix labor probs, wanted to do same for competitors. First C
sued L to stop.
i. Holding: Consider how much L was involved in C’s affairs; NOT a blanket
rule, only when danger of revelation of that C’s confidences is so great will
injunctive relief be given. (L knows SO much, as here).
IV. IMPUTATION
A. MR 1.10: If L in firm has conflict under 1.7 or 1.9, will it be imputed to firm?
1. No Moving: MR 1.10(a)
a. YES: If any L in firm is DQ’d from repping C, all Ls in firm are DQ’d unless the
DQ is based on L’s personal interest (1.8) and doesn’t present a significant risk of
materially limiting the rep of the C by the remaining Ls.
i. Example: L works at Firm1 w/ Partner repping C1. C2, C1’s adversary, comes
to L for rep. L cannot rep b/c Partner would be DQ’d under 1.9.
2. Moving: Firm. MR 1.10(b) – DQ of Old Firm
a. NO, BUT...: If L moved, firm can rep person w/ interests materially adverse to L’s
C unless the firm still reps that C, OR the matter is substantially similar to the
former one AND any L still in the firm has confidential info that’s material to the
matter and can be used against former C.
3. Moving: Lawyer. MR 1.9(b) – DQ of L, New Firm
a. L works at Firm1 w/ Partner repping C1. L leaves Firm1, joins Firm2. C2, C1’s
adversary, comes to Firm2 for rep. If L repped C1 at Firm1…
i. L Involved A Lot: Under 1.9(a), L would be DQ’d from opposing C1 in same
or substantially similar matter – had to have acquired info material to the
matter at Firm1. Firm2 would be DQ’d.
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ii. L Barely Involved: If L involved enough to have been considered C1’s L but
not enough to have learned material confidences that he could pass to Firm2,
L DQ’d but not Firm2.
b. If L learned nothing material about C1 at Firm1…
i. One Approach: L didn’t “rep” C1, so he wouldn’t be DQ’d nor would Firm2
even if the matter is the same or substantially related.
ii. Another Approach: Even if L learned nothing at Firm1 about C1, L DQ’d b/c
of loyalty concerns BUT Firm2 isn’t DQ’d. 1.9(b)
4. Client Consent: Conflict can be waived if informed consent of both Cs and reas L
would be able to provide competent and diligent rep; rep not prohibited by law; and it’s
not one C suing another in same litigation/transaction (MR 1.7)
B. Screening
1. Majority Rule: No screening permitted. MR 1.10.
2. Minority Rule: Screening Permitted.
a. Nemours: L worked at Firm1 as associate L, reviewed docs; then moved to
Firm2. L didn’t know Firm2 was involved in the litigation, and Firm2 didn’t know
L was involved. (Opposing parties)
i. Considerations w/ DQ & Screens: Firm size, extensiveness of screening,
degree of prior Ls involvement, and effect on new C from DQ’ing firm.
ii. Cone of Silence: Firm2 moved L away from any contact w/ the case.
iii. Even though no express A/C relationship, a fiduciary obligation existed b/c C
disclosed info acting on the belief that such submission was made for L’s boss
to render him legal service (he has confidential info).
iv. Holding: L DQ’d b/c sat in on strategy sessions, learned confidential info;
meets all 4 elements under 1.9. But not firm, b/c good screening.
3. Explicit Exception to Imputed DQ: MR 1.11 Screen. Want to protect Cs right to
retain counsel of its choice and enable Ls to practice w/o excessive restrictions.
a. Subjective: Individual L is responsible for guarding secrets of former C
b. Objective: Move away all docs to a place only Ls working on case would have
access to and isolate those Ls.
4. Screening disfavored b/c: (1) Can’t prove to former C confidential info isn’t
leaking across the screen, (2) L’s are supposed to talk to each other and pool info, and
(3) econ incentive to pool info b/c building on capital already have instead of
reinventing the wheel
C. Nonlawyers: Paralegals, Secretaries and Law Students. If nonL would be DQ’d from
involvement in matter (b/c a L in a similar situation would be), the DQ isn’t imputed to Ls in
the firm in which nonL is working. Tainted nonLs must be screened from personal
participation in the matter.
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DUTY TO THE COURT and THIRD PERSONS
I. RULES
A. MR 3.1: Meritorious Claims/Contentions. Duty not to abuse legal procedure. Don’t bring
claim to court unless there’s a basis in law and fact for doing so that’s not frivolous, which
includes good faith args for extension or reversal of existing law. It’s not frivolous even tho
L thinks C won’t win. L for D in criminal proceeding may defend it as to require BARD.
1. Facts need not be fully substantiated before acting; L may rely on discovery to develop
vital evidence
B. Policy: Duty to work to fully benefit C while not abusing legal procedure.
C. MR 3.2: Expedite Litigation. Reas efforts to expedite litigation consistent w/ C’s interests.
Test: Whether L acting in good faith would regard the course of action as having some
substantial purpose other than delay.
D. MR 3.3: Candor Toward Tribunal [in the Tribunal]. L can’t knowingly make false
statements as to fact/law or not correct false stuff, fail to disclose to tribunal legal authority
in controlling J that’s directly adverse to C’s position and not disclosed by opposing
counsel, or knowingly mislead by offering evidence L knows to be false. L’s duties
continue until end of the proceeding and apply even if compliance requires disclosing info
protected by 1.6. (Settlement – Spaulding).
1. If false info has been introduced by L or L’s witness: L must take reas remedial
measures including, if necessary, disclosure to tribunal.
E. MR 4.4: Prohibits bringing claims that embarrass, delay or burden third person when they
have no other substantial purpose.
II. Gilson: Strategic Litigation
A. Strategic Lit: Brought to inflict a cost. Interferes w/ free markets b/c bringing unjustified
claims to stop competition; inflicts costs that have no social benefits.
1. Ex Ante Strategy: L as gatekeeper is most efficient; L has a lot of info, hard for C to
hide motives from him.
a. L’s Incentive: Enlightened self-interest – have a sense they’re doing something
socially valuable. This worked until around the 1980s when company’s switched
from outside counsel to in-house counsel. Then Ls stopped functioning as
gatekeepers b/c in-house counsel loses capacity to be good gatekeepers – work for
best interest of company rather than society.
2. Objective or Subjective Test of Suit’s Merit
a. Objective: Look at publicly known facts and law and ask if this is likely to be a
bad claim.
i. May be underinclusive (allows strategic claims to go forward) or
overinclusive (knocks out valid claims and gives people less than they’re
entitled to under their vindication rights)
b. Subjective: Look to motivation of parties – to inflict cost or vindicate legal right?
(Hard to answer b/c C’s story often looks legit)
3. Possible Solutions: Tort suit for malicious prosecution (even though has a disad: comes
ex post; ex ante is better b/c saves costs) and Ls functioning as gatekeepers
4. Malicious Prosecution Elements: (1) D instituted action against P;
(2)
Proceeding was terminated in favor of P; (3) Absence of probable cause for the
proceeding; (4) D acted out of malice or other improper purpose; (5) P suffered special
injury for this C/A
B. Litigation that vindicates legal rights: Seeking legit remedy
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III. RULE 11
A. Purpose: Attempt to control strategic litigation thru judicial intervention.
B. Rule: By presenting to ct advocacy or written doc, L certifies it’s not being brought for
improper purpose, such as delay or harass; claims are warranted or trying to modify law;
allegations have (or will prob have) support; denials of factual contentions are warranted on
the evidence.
1. Continuing Obligation: Obligation to correct erroneous filings/advocacy
2. Vicarious Responsibility on Firm
3. Safe Harbor: If other side challenges pleading, have 21 days to w/draw & modify
4. Discretionary sanctions: Fines to deter violations, not compensating the offended
party. Go against L, C and firm. Paid to court. POSSIBLY, professional discipline.
5. Attys fees for “improper purpose” cases
C. Affirmative Duty to Investigate What File/Advocate to Ct
1. Garr: MINORITY APPROACH.
a. Duty: Non-delegable duty on every L filing claim to investigate allegations.
b. Disads of this Std: Means every L has to basically duplicate work of other Ls
2. Dissent: MAJORITY APPROACH. Objective ex ante test of “meritorious
complaint.” Eliminates req that you actually do your own inquiry.
a. Test: At time of filing complaint, would a reas L, knowing info that was publicly
avail, have determined that complaint had enough merit to be filed? (reas inquiry)
b. Policy: Knocks out pleadings that aren’t reas to bring (underinclusive test as in
Gilson, which deprives people of valid property rights b/c might need to litigate to
discover if the case is meritorious and need to protect the right to sue and be sued.)
3. Golden Eagle: L made misleading args, suggested there’s a solid law about something,
while in reality, the case L cited raised the issue but didn’t decide it.
a. Holding: No sanctions; best way to argue in any case is that existing law is in
your favor, so Ls should be aggressive about spinning law in their favor.
b. Result: Rule 11 doesn’t put strong constraints on legal arg
c. 1993 Ams to Rule 11: Rejected position of Golden Eagle that individual
allegations are not sanctionable if paper as whole is nonfrivolous.
4. Szabo: Brought race discrim claim, made opposing counsel work all wkend, then
dismissed. Holding: Sanctions b/c claim was so far off it was wacky.
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IV. FRAUD ON THE COURT and OBSTRUCTION OF JUSTICE
A. MR 3.3: Candor to Ct. L can’t make false statements re fact or law or not correct false
statements; take reas remedial measures to get out false evidence/testimony.
B. MR 3.4: Fairness to Opposing Party and Counsel. L shall not obstruct party’s access to
evidence; alter, destroy or conceal document having potential evidentiary value; make
frivolous discovery requests
C. Three Forms of Obstruction of Justice: Only applies to ongoing legal proceedings
1. Altering Physical Evidence
a. Stenhach: Ls got gun used in homicide and put in drawer.
i. MR 3.4: Obstructing Access to Evidence. L can’t obstruct or counsel
another to obstruct other party’s access to evidence or alter, destroy or
conceal stuff having potential evidentiary value.
ii. Turnover Rule: Criminal defense atty in possession of physical evidence
incriminating C may return it to its source if he can do so w/o hindering the
prosecution or altering it. Otherwise, must deliver it to P w/o ct order. But P
may not disclose to jury the source of the evidence.
b. Belge: Dead bodies. Before trigger duty to turn over, can do nothing.
c. Document Shredding - Arthur Andersen: L for Enron instructed its employees
to destroy documents.
i. Elements: (1) Impeding is corrupt, (2) Awareness of wrongdoing, (3) Nexus
w/ foreseeable legal proceeding to which docs are material.
ii. RULE: It’s okay to persuade others to shred documents under doc retention
policy when no contemplation of any particular official proceeding in which
those documents might be material. Need a nexus b/w the obstructive act
and the proceeding, b/c if the D lacks knowledge that his actions are likely to
affect the judicial proceeding, he lacks the requisite intent to obstruct.
2. Fraud on the Court
a. Thoreen: L placed fisherman next to him; didn’t get ct’s permission/tell ct.
i. Holding: Vigorous advocacy by L may entail impeaching or confusing a
witness, even if L thinks witness is truthful, or refraining from presenting
evidence even if he knows the truth. But this deceived ct; it was obstruction
b/c impeded ct’s search for truth, resulted in delays, and violated ct custom.
ii. Criminal contempt: Delay or hindering ct’s ability to ascertain truth is
sufficient, but L must have requisite intent. For intent, it suffices that L
should’ve been aware his conduct exceeded reas limits and hindered search
for truth. Convicted.
iii. Unlike Max Steur: Not just casting skeptical doubt on something P is
saying when attempt to prove element of case, L made affirm assertion
himself (misrep)
iv. Unlike Golden Eagle: This is fact, not law; not allowed to affirmatively
misrep fact (but maybe law, since L in Golden Eagle sorta got away w/ it).
b. Matter of Krueger: L told C to rent room in Wisconsin to satisfy residency req.
for divorce. L knew C planned on leaving Wisconsin, but told C what to say to
manifest intention to stay in Wisconsin to the ct.
i. L helped C fabricate false fact. Affirmative misreps as to fact were made in
ct  fraud on the ct
ii. L gets in trouble b/c he knew C’s intention; if he didn’t know, he would’ve
unwittingly assisted the C and that wouldn’t make the L culpable.
3. Witness Preparation and Fostering Falsity: See Page XX
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V.
PERJURY
A. Civil Cases
1. MR 3.3: Candor to Court
a. L can’t: (a1) Knowingly make false statements of fact/law to court, (a2) fail to
correct a false statement of material fact/law he previously made, (a3) or offer
evidence he knows to be false. He must take remedial measures if material false
evidence has already been offered by him, his C, or any of L’s witnesses.
i. L’s Knowledge: L can’t offer evidence he knows is false (which can be
inferred from circumstances). L can also refuse to offer testimony he reas
believes is false, unless it’s for a criminal D, in which case L must know.
ii. Knowledge: ACTUAL KNOWLEDGE
b. Criminal Conduct: (b) If L knows someone has or will engage in criminal or
fraudulent conduct related to the proceeding such as perjury, bribery, jury
tampering, destruction/concealment of docs, L must take remedial measures,
including, if necessary, disclosure to tribunal.
i. Past Perjury: Duty to disclose when (1) L can’t persuade C to rectify the
perjury; and (2) L has “actual knowledge” that C perjured herself.
ii. Intended False Evidence or Testimony: When L knows C intends to
testify falsely or introduce false evidence, L must:
1) Remonstrate: Discuss w/ C
2) [Recess]: Stop the deposition or trial.
3) Rectify: If C surprises L w/ false evidence or L learns that prior
evidence was false, L must persuade C to take corrective action like
w/draw some statements or evidence.
4) Resign: If C refuses to correct, L must resign b/c continuing rep would
assist the C’s fraud.
5) Reveal: May reveal confidential info to rectify the fraud and protect
L’s own interest in not being associated w/ fraud if w/drawing won’t
correct it.
c. Obligation ends after proceeding is over: (c) Duties apply even if compliance
requires disclosure of confidential info protected by 1.6.
2. Representing a C whom L knows is lying in deposition
a. Lying = Crime: Whether during trial on the stand or during a deposition
i. Civil Standard: L can refuse to put on testimony if “reas disbelieves”
b. Crary: While L repped C, started dating her. During a deposition, opposing
counsel asked Qs about where she was at particular times and w/ whom; she said
she was w/ a friend, but she was really w/ L. L said nothing, but L’s partner
adjourned the depo, asked L the truth, and L told.
i. Holding: L charged w/ creating evidence when he knew it was false and
disbarred. The vice of L’s conduct was not in failing to reveal the truth but in
participating in the corruption of the fact-finding system by knowingly
permitting C to lie. Should’ve recessed and stopped testimony. A/C privilege
falls when C commits perjury; no duty exists to C when perjures herself.
3. Freedman, Frivolous Args
a. Trilemma: L has 3 obligations – (1) to give Cs effective assistance of counsel
(competence), need to seek out all the facts (2) to encourage trust b/w L and C
(duty of confidentiality), (3) candor to the court.
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B. Criminal Cases: Don’t want L JUDGING C
1. D’s Constitutional Rights
a. 5th Am: Right to testify in own defense or right against self-incrimination
b. 6th Am: Effective Assistance of Counsel
2. Nix v. Whiteside: C said he killed guy b/c guy was reaching for gun under pillow.
Later, C told L he didn’t see gun. C thought he had to say he saw gun to get self-defense
claim. L told C that would be perjury, and if C did it, L would tell the court and try to
w/draw from the rep. C didn’t, lost, and sued b/c denied effective assistance of counsel.
a. Ineffective Assistance of Counsel: (1) L’s performance falls below that of a “reas
competent” L; (2) L’s poor performance affects the rep sufficiently to “undermine
confidence in the soundness of the result.”
b. Conflict of Duties: (1) Duty of loyalty and zealous rep (to rep C, not judge him);
(2) duty of confidentiality to C; (3) duty of candor to ct.
i. L’s first duty when confronted w/ proposal for perjurious testimony is to
attempt to dissuade C; under no circumstances can L either advocate or
passively tolerate a C’s giving false testimony.
c. Holding: No right to have assistance of counsel in presenting false testimony, so
no harm, so no IAC.
3. How much should we require L to know/believe about whether C will perjure
herself before we permit L to refuse to put on C’s testimony?
a. MR 3.3(c) permits L to refuse to offer evidence L “reas believes” is false, but can
only refuse to offer criminal D’s testimony if L “knows” it’s false.
b. 3 Tests of “Knowledge” for Criminal Defense Ls
i. Stated C intention to perjure herself
ii. Firm Factual Basis: If facts will get to jury anyway, don’t refuse
iii. BARD: L knows BARD that C will perjure herself on basis of facts that will
not become known to the jury.
*If L has info the jury WON’T hear unless L speaks up, has a stronger arg to disclose.
c. Policy Consequences: If we permitted Ls to refuse to put on C’s testimony
whenever they sincerely believed the testimony would be false, we would be:
i. Invading the province of the jury by inviting L’s to determine the credibility
of their C’s testimony, a task reserved to juries
ii. Allowing defense counsel to discharge this task by applying a lower std of
proof (good faith belief) than that applied by juries (BARD) would
substantially undermine both L’s duties of loyalty and zealous advocacy and
accused’s right to have case heard by jury, applying a BARD std.
4. 3 Other Reasonable L responses to C who “intends” to perjure herself
a. Disclosure req’d if persuasion doesn’t stop C from perjuring and L can’t w/draw
b. Free Narrative: For L who can’t dissuade C from perjuring or w/draw.
i. L: (1) stands mute while D presents false version in narrative form in his
own words unaided by any direct examination. (2) L can’t discuss the known
false testimony in closing args.
ii. Court: (1) Shouldn’t instruct jury that it may draw negative inference from
this kind of testimony and (2) prosecution can’t comment negatively on the
testimony in the presence of jury.
iii. Reconciles duty conflict: Can’t stop C from testifying b/c C has const right
to do it, but L can’t assist, so allow free narrative.
c. L who can’t dissuade C from testifying falsely or w/draw can put on the false
testimony as he would any other testimony.
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VI. WITNESS PREP & FOSTERING FALSITY
A. MR 1.2(d): L can’t counsel C to engage in, or assist C in, conduct L knows is
criminal/fraudulent. Because “knowing” often refers to “actual knowledge” or “firm factual
basis,” L can often ignore anything that’s not “plainly apparent” (this precludes only
conscious ignorance).
B. MR 1.3: Diligence. Zealous advocacy.
C. MR 3.4: Fairness to Opposing Party and Counsel
1. (a) L can’t obstruct another party’s access to evidence, alter or conceal a doc or other
material having potential evidentiary value, (b) falsify evidence, counsel or assist a
witness to testify false or offer an inducement to a witness to do so.
2. Policy: Fair competition in the adversary system is secured by prohibiting destruction
or concealment of evidence, improperly influencing witnesses, obstructive tactics in
discovery procedure, and the like.
D. MR 4.4: Respect for rights of 3rd persons
1. (a) L shall not use means that have no purpose other than to harass, embarrass or burden
a 3rd person or use methods of obtaining evidence that violate their legal rights. (b) L
who receives doc relating to the rep of the L’s C and reas should know the doc was
inadvertently sent shall promptly notify the sender.
E. Lecturing
1. Integral to L’s role b/c essential to a coherent and reas accurate factual presentation.
Key to lecture is to explain the law to get to the facts. But provides opportunities for Ls
to encourage witnesses to adopt convenient, if not necessarily accurate, testimony
a. Examples: C listens to L’s discussion of controlling legal principles and begins to
understand that a form of insanity may be the only defense under the facts
“Remember to say you saw the NAMES on the BAGS, the more often you were
around the product, the better for your case.”
b. Freedman: Need to jog peoples’ memory for them to remember stuff; difference
b/w recalling and recognizing (triggers memory). L has right to put C’s
recollections in best light.
2. Illegitimate: When try to induce strategically best testimony even if false, BUT, L
won’t be guilty of suborning perjury if L doesn’t know C will use this info to perjure (L
studiously tries to avoid knowing)
a. No external sanction b/c can’t prove L’s knowledge. So comes down to L’s
conscience.
b. Motive Test: Lecture is ethically impermissible if motivation is to plant in Cs
mind clear enough idea to guide C to give most advantageous testimony.
a. Effect: Lecture is wrong if creates false testimony. Lecture can become same
as suborning perjury.
F. Fostering Falsity
1. Michigan Ethics Opinion: C charged w/ robbery; has friends who will give truthful
testimony he was w/ them at time of crime. C told L he robbed, but State mixed up time
of robbery b/c C knocked guy unconscious. Would it be ethical for L to subpoena
friends to testify C was w/ them at the alleged time of the crime?
a. Holding: Yes. Duty of zealous rep requires crim defense L to use any truthful
evidence that may help C. Nor must defense L ignore truthful evidence simply b/c
counsel knows C is guilty – L is a partisan advocate, not an impartial fact-finder.
b. Fine Line: Almost fraud b/c inference L is trying to get jury to draw is false and L
knows that; have intent element to induce false belief. But not fraud b/c D is
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rebutting P’s case (not first mover, unlike Thoreen), D is establishing reasonable
doubt, and the fact being put on is true.
i. Don’t have to correct mistake P made, but can’t incorporate it into your case
since that would be misleading.
2. Freedman: L’s duty in adversary system is to make the truthful witness “appear to be
mistaken or lying.”
a. Intentional ignorance: C put on notice that he’s not to tell L anything that might
cause L to be less vigorous in her advocacy
3. Mitchell: Attempting to raise reas doubt is fine; bringing out testimony, not itself false,
to accredit a false theory, isn’t the same as arguing a false theory.
4. Subin: “Improper for L who knows BARD the truth of a fact to attempt to refute that
fact thru introducing evidence, impeaching evidence, or argument.”
G. Witness Tampering: MR 3.4 – Shall not counsel, assist or induce a witness to testify
falsely. Whether or not your advice causes the person to actually testify falsely, you can
still be convicted of obstruction of justice (remember: need ongoing legal proceeding).
1. Cintolo: L convicted of obstructing justice b/c advised C to refuse to testify before
grand jury even though C had immunity. L did so to keep jury from finding out about
criminal activities of others, whom L repped – corrupt motive. Witness tampering b/c C
had no right not to testify, so L was advising C to break the law.
a. RULE: Means, though lawful in themselves, can cross the line if employed w/ a
corrupt motive to hinder administration of justice, so long as they have the
capacity to obstruct.
2. Fayer: Persuading non-C to take the 5th when it’s in your C’s best interest.
a. RULE: One corrupt motive is enough for obstruction of justice in the form of
witness tampering. Means of persuading are illegitimate when they’re done in
your, or your C’s, best interest.
b. Problem: This criminalizes persuasion and hampers zealous advocacy
3. Kenelly: L assisted C in “settling” civil suit on terms where C agreed not to testify
against D in crim action against him.
a. Obstructing Justice: L couldn’t do this b/c had to know his C only accepted $5K
as a bribe to not be a necessary witness in D’s case. Can’t stop necessary witness
from testifying.
b. NOTE: For obstruction of justice, need ongoing legal proceeding. BUT, even if
proceeding hasn’t started yet, can’t start shredding docs b/c you know tomorrow
you’ll be sued.
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VII. COMMUNICATING W/ PARTIES AND WITNESSES
A. MR 4.2: Prohibited Contact Rule. L can’t contact “person” about this representation
whom they know (but “can’t close eyes to the obvious”) is repped by another L w/o that L’s
permission (or is authorized by law or ct order), but Cs can contact each other. Applies no
matter what, even if C wants to waive the protection or C initiates the communication. L
must stopping talking once L find out this is a C.
1. Policy: Prevents deception of a lay person and protects confidential info.
2. Example: Even if L sends the C a copy of a letter L sent the person’s L.
3. Corporations: L can’t contact a constituent of the organization who supervises, directs
or regularly consults w/ the organization’s L concerning the matter or whose
act/omission in connection w/ the matter may be imputed to the organization. But
consent of organization’s L isn’t req’d for communication w/ former constituents. If a
constituent is repped by own counsel, consent of that L is enough (don’t necessarily
need consent of organization’s L).
a. Who is a “person”? 3 Tests
i. Control Group: People who exercise authority wrt litigation
ii. MAJORITY: Messing.
iii. Evidence Law: Employees whose statements would be admissible in ct
under the admissions exception to the rule against hearsay.
b. Messing v. Harvard: Woman sued Harvard for gender discrim.
i. RULE: Ban contact w/ those employees who have authority to commit the
organization to a position regarding the subject matter of the rep (USC –ees
who say they discriminated while there); those w/ authority to make
decisions about the course of the litigation, such as when to file suit and
when to settle; and those who are alleged to have committed the wrongful
acts at issue in the suit.
ii. Effect: This rule allows a litigant to obtain more meaningful disclosure of
the truth by conducting informal interviews w/ certain employees of an
opposing organization; promotes efficient discovery.
iii. Holding: The employees here weren’t involved in directing the litigation,
none of them were alleged to have committed wrongful acts wrt the
underlying lawsuit, and the managerial authority that some of them
exercised over the P wasn’t at issue in this lawsuit; they were all mere
witnesses to the events, not active participants.
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VIII. DUTIES TO THIRD PARTIES
A. MR 2.3: Evaluation for Use by Third Persons. If evaluation will have material, adverse
effect on C, need informed consent (as in Roberts, general partners, since disclosing L and
C aren’t on same page would be adverse to C, need consent.)
B. MR 4.1: Truthfulness in Statements to Others. L can’t lie to 3rd person re material
fact/law or fail to disclose material fact when disclosure is necessary to avoid assisting a
criminal act by C, unless prohibited by 1.6.
1. Generally, no duty to inform opposing party of relevant facts, but req’d to be truthful
when disclosing. Can have misrep thru misleading statements.
C. Duties: If necessary, full disclosure (Mershon), opportunity to get another L and consent.
D. Causes Of Action By Third Parties
1. Legal Malpractice
a. Elements: Duty, Breach, A/C, P/C, Harm
b. Pelham: Divorce action; decree said children prime beneficiaries of husband.
After settled, he remarried and named new wife beneficiary.
c. Rule: To recover for legal malprac as non-C, have to prove primary purpose of
A/C relationship was to benefit or influence the 3rd party. Then could prove L
owed a duty to non-C.
d. Holding: Children were only incidental to A/C relationship b/c that husband name
children beneficiaries wasn’t primary reason wife retained L; principle purpose
was for divorce, so L had no duty to the kids. She needed to get a separate L for
the kids.
e. Policy: Making L owe duty to another person would interfere w/ undivided
loyalty which L owes his C and would detract from achieving most advantageous
position for the C. Also, potential conflict problem: it’s possible for interests of
mother and children to diverge during divorce proceeding.
2. Fraud
3. Neg Misrep
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IX.
FRAUD: Intentional Misrepresentation
A. MR 1.2(d): Prohibited Assistance. L can’t counsel or assist C to engage in or conceal
committing crime/fraud, but can discuss w/ C legal consequences of proposed conduct. If C
uses L’s advice to commit crime, L isn’t automatically at fault (needed to know).
Withdraw: L can’t continue assisting C when L knows it’s unlawful. In some cases, L will
need to also disaffirm opinion letters to 3rd parties.
B. MR 4.1: L shall not knowingly make false statement of material fact/law to 3rd person, or
fail to disclose material fact when disclosure necessary to avoid assisting criminal or
fraudulent act by C, unless disclosure prohibited by MR 1.6 (probably a mandatory
disclosure rule, since MR 1.6 permits disclosing to prevent crime/fraud).
1. Generally, no affirmative duty to disclose relevant facts to opposing party. But misreps
can occur by partially true but misleading statements/omissions that are the equivalent
of affirmative false statements.
2. When C’s crime/fraud takes the form of a lie or misrep, L can ordinarily w/draw to
avoid assisting it. But sometimes it may be necessary for L to give notice of the fact of
w/drawal and disaffirm an opinion or the like. In extreme cases, law may require L to
disclose info relating to the rep to avoid being deemed to have assisted the C’s fraud or
crime. If L can avoid assisting C’s crime/fraud only by disclosing, then he’s req’d to do
so, unless prohibited by 1.6.
C. Elements
1. False or misleading statement, or failure to disclose when duty to do so
2. Of material fact: Has a natural tendency to influence the decision-maker
3. Made w/ knowledge of its falsity: Intent to deceive, including willful blindness or
reckless disregard of truth
4. [in connection w/ securities transaction: *special to securities fraud]
5. Upon which P reasonably relied: P can’t reas rely on “best car ever”
6. To P’s detriment: Commercial loss
D. Criminal Liability for Fraud – Gellene: L repped C, C went into bankruptcy and L
applied to rep it in bankruptcy proceeding. Swore he had no relationship w/ C’s creditors;
disclosed relationship w/ 2 other Cs but said those were “unrelated matters”; didn’t disclose
other relevant creditors whom he repped. Says he made mistake about conflict; no intent.
1. Holding: Fraud. Misled court b/c made it seem he did a thorough check and found no
potential conflicts of interest. Had a duty to disclose one of his conflicts before even
asked, b/c that’s required by the bankruptcy application.
a. Intent: As bankruptcy L, had to know your disclosure reqs under law that this had
to have been a conflict; we don’t think anyone as sophisticated as you could make
a “mistake” like that.
2. Standard of Proof: BARD
E. Civil Liability for Fraud
1. Klein v. Boyd: Once a firm has chosen to speak (thru a disclosure package), it may not
omit facts material to its non-confidential opinions.
a. Duty: No duty to tell investors; duty arises once firm affirmatively communicates
w/ them, then have duty to disclose all b/c otherwise would mislead.
b. RULE: An L who can fairly be characterized as an author or co-author of a C’s
fraudulent document may be held primarily liable to a 3rd party investor under
securities laws for the material misstatements or omissions contained in the doc,
even when the L didn’t sign it and the investor was therefore unaware of the L’s
role in the fraud b/c L knew investors would rely on it.
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c. Holding: L had duty to correct the material omissions made in its statements. But
court is not saying that providing substantial assistance alone to a C is enough for
liability; need to be the author. Could reasonably infer that L intentionally
concealed material info from the Nov and May disclosure docs.
d. Policy: Allowing L to be immune from liability would encourage this.
e. Standard of Proof: More likely than not
2. Finley Kumble: L assisted C in tort of conversion b/c had no legal basis for arg he
made in opinion letter. So L liable for intentional tort. (If L just said to C this is fine but
didn’t write letter, it would be malprac, not intentional tort.) Helped commit the tort b/c
wrote the letter and that’s an “act”, and took someone else’s property w/o any legit legal
basis (conversion).
F. Aiding and Abetting: Secondary Fraud
1. Elements
a. Fraud by the Principal (Client)
b. L has knowledge of fraud: Can be est’d by recklessness: would reas L have
proceeded in face of these red flags?
c. Substantial assistance from L: Eg – Action furthering fraud, advice to C on how to
execute fraud, advice to C on how to avoid detection by law
2. OPM: Scam dependent on Ls paying little attn to what was going on under their noses.
Ls had to have done more due diligence.
3. Securities: Can’t get civil liability, only criminal brought by SEC.
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X.
NEGLIGENT MISREPRESENTATION
A. Rules
1. MR 1.1: Competent handling of matter including checking factual/legal stuff
2. MR 2.3: Evaluation for use by 3rd parties
B. Elements: Deception as result of failure to exercise reas care.
1. Material false representation or omission when have duty to speak
2. Made w/o reas care or w/o adequate basis or investigation: Didn’t do investigation a
reas L would’ve done.
3. Upon which they reasonably rely to their detriment (econ loss)
C. Greycas: D had to submit letter to company from an L, assuring there were no prior liens
on the machinery that would secure loan. L wrote letter w/o conducting search for prior
liens but said he did and that there were no liens.
1. Neg Misrep: L gave company info that was intended to guide it in commercial dealings
w/ C. D therefore had duty to use due care to see that the info was correct. Causal
relationship: G wouldn’t have made the loan w/o D’s letter.
a. Duty: Following Pelham, primary purpose of hiring L was to influence company
to make loan so had duty to them.
b. (In this case, only sued for NM even though it’s fraud b/c NM is covered by
insurance but not fraud.)
2. Fraud: This was clearly misrep, but it was more than neg, was intentional fraud since D
knew he lied. Also, concealment of relationship w/ bro-in-law, L, could support fraud.
D. Roberts: Opinion letter for loan. L said all partners were gen’l partners. Relying on letter,
made loan. Cs defaulted, then defended themselves by claiming they were only limited
partners. Creditor sued firm for fraud and neg misrep, claiming the firm believed the
partners were limited when they wrote letter.
1. Holding: No fraud b/c no intent to deceive (we sincerely believed they were gen’l
partners, even though they thought they were limited partners), but neg misrep b/c even
though Ls honestly believed they were gen’l partners, L owed lender explanation of
why L and C weren’t on same page about this fact (lender relied on L).
E. Greyhound: G knew farm equipment wasn’t new, but colluded w/ C and sent L docs
saying equipment was new. Relying on C and G, L didn’t conduct lien search but wrote
opinion letter saying equipment was unencumbered.
1. Holding: For L; although letter was neg misrep (“no liens”), under comparative neg,
G’s neg exceeded L’s neg  Defense ag NM.
F. FDIC v. O’Melveny: FDIC stepped into shoes of C and sued L for not exposing fraud.
Sued for neg misrep, malprac and breach of fiduciary duty. MR 1.13.
1. Issue: What are L’s responsibilities when people in charge of the entity are defrauding
third parties and harming the entity itself by exposing the entity to liability by
committing crime?
2. Holding: Disclosure necessary; L liable. When FDIC stepped in, they were harmed by
L’s neg documents already sent. L’s owe obligation to entity.
3. Consequences: Ls have to consider when they do illegal stuff for management they can
be sued for malpractice by anyone who steps into shoes of corporation.
4. NOTE: Normally, a corp can’t sue L for fraud b/c has unclean hands itself
5. Securities laws: Can’t be liable to 3rd parties on basis of neg; had to have been at least
reckless or willfully blind. But Ls owe due diligence.
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